Mailboxes Boss: Open Letter To Premier

December 14, 2011

In an open letter to Premier Paula Cox, Mailboxes Unlimited president Steve Thomson is urging her to reconsider proposals which could lead to the introduction of  a heavy new tariff on goods Bermudians import to the island using couriers.

The Premier and Finance Minister recently said Government was considering introducing a 35 percent duty rate on all personal shopping through couriers — a move Hamilton businessman Mr. Thomson said would be damaging to both his industry and Bermuda consumers.

“My point is that shipping in via courier is only one method of shipping items into Bermuda once they have been purchased online,” he said. “To penalise couriers is singling out only one method of importing and simply unfair.”

Mr. Thomson said the Premier’s rationale for the proposed duty — to help shore up the island’s ailing retail sector — was protectionist and would not encourage Bermudian stores to step up their game.

“Retailers need to remember that the people demand choice and that they will react to any attempt to reduce their choice or inflate their tax burden,” he said. “Retailers have a significant advantage now with the payroll tax relief.

“Now is the time for them to be more creative. For many years they simply did not change and Bermudians know this. With the advent of competition, they are pushing back against Government to the detriment of the people of Bermuda.

“The idea that this duty rate hike is being considered to prop up inefficient retailers to the detriment of local Bermudians is simply unfair and unacceptable. The shipping industry in Bermuda also employs almost 1,000 Bermudians when you include all methods.

“We need support too.”

Mr. Thomson’s letter appears in full below:

Dear Madame Premier,

I waited as long as possible before putting pen to paper in regards to the attached. However, the screams and cries from our customers have encouraged me to stand up and be counted. You have been kind enough in the past to read my emails when issues are relevant.

The media recently carried this comment attributed to you.” Ms Cox said the changes to the Customs duty at the airport looked likely to be followed by introducing the 35 percent rate to all personal shopping through couriers.”

The passion and anger by Bermudians on this issue is quite remarkable and I wanted to weigh in on my thoughts in a precise manner.

  • 1. Residents and Bermudians want and need a choice when shopping, whether locally or abroad. To be forced to shop locally by penalizing them via duty rates is, quite honestly, unfair and unreasonable.
  • 2. The perception is that this is simply a massive tax hike to people that are already hurting in Bermuda. Tax hikes are never received well.
  • 3. If a Bermudian manages to buy an item online and bring it in and save money, then it follows that the money that they save will be spent elsewhere in Bermuda and help the economy. Why should the retailers get all of their discretionary income in this instance?
  • 4. The retailers currently have the benefit of “payroll tax relief”. The playing field is already tilted in their favour. How much more Government intervention would they like along the road of forcing Bermudians as to where to shop?
  • 5. I would argue that there would be a huge backlash to the implementation of this policy against both the retailers who drove this policy and the government for increasing taxes on the people.
  • 6. Lastly, and possibly most significantly, online shopping is not just handled by couriers. Residents buy fridges, washers, couches, etc and these items are brought in weekly in consolidated containers through BEST, BOSS, Bda Forwarders, Paget Freight, Fast Forward Freight etc., to name a few.

Many online purchases are brought in through air freight at the airport including AA, Delta, Air Cda, BA , US Air, Continental etc.

Finally, The General Post Office recently did an island wide mailing to everyone in Bermuda arguing that residents should shop online and ship their items in through the Post Office with a marketing campaign ”Lighten your load at the airport and keep your wallett heavy!”

They used OHMS and received free postage to directly compete with private business. I have to pay for my postage when marketing our business.

My point is that shipping in via courier is only one method of shipping items into Bermuda once they have been purchased online. To penalise couriers is singling out only one method of importing and simply unfair.

Retailers need to remember that the people demand choice and that they will react to any attempt to reduce their choice or inflate their tax burden. Retailers have a significant advantage now with the payroll tax relief.

Now is the time for them to be more creative. For many years they simply did not change and Bermudians know this. With the advent of competition, they are pushing back against Government to the detriment of the people of Bermuda.

The idea that this duty rate hike is being considered to prop up inefficient retailers to the detriment of local Bermudians is simply unfair and unacceptable. The shipping industry in Bermuda also employs almost 1,000 Bermudians when you include all methods.

We need support too.

In closing, we need to remember that no items are really made in Bermuda. Retailers, much like ourselves, import everything into Bermuda and simply resell non Bermudian items. Why is their method of importing product so inherently superior to our method?

We, the shipping industry, actually pay more taxes than the retailers as we don’t have the benefit of payroll tax relief. Our industry needs support so we can support the government. All we ask for is a level playing field not one arbitrarily skewed by government policies in favour of a particular industry.

Thank you for reading my message as its heartfelt and needs to be heard amongst the din of the retailers pushing for subsidies which would harm our people.

All the best,
Steve Thomson
President
Mailboxes Unlimited Ltd

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Comments (109)

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  1. Just Curious says:

    thank you, thank you and thank you!

    • Do NOT Buy Bermudian! says:

      Yes, Thank you Steve! Here’s the deal though – if this thing goes through, I will NOT start buying Bermudian – I WILL SIMPLY GO WITHOUT!!!! I refuse to let this clueless and very irresponsible gover(n)ment tell me where and how to spend my hard earned money. IT’S MY MONEY, I WILL SPEND IT AS I SEE FIT OR I WON’T SPEND IT AT ALL!!

      My savings is going to get FAT! Take that!!

  2. REALISM says:

    AMEN TO THAT!

    • Cha says:

      Time for a tea party! Taxation without representation I believed it has previously been referred. If they were really interested in helping retail providers they would cap retail space rental prices in town and cap retailers markup ability…say 200% on wholesale cost. Plus halve their duty (Let’s face it Gov needs the money). This would allow the retail stores to carry more of a selection at more competitive prices and people may be more inclined to “buy Bermuda”.

      These tax increases are nothing more than trying to line Gov pockets and are not really benefiting the retail sector; that was an excuse to raise them rates without kicking up too much of a fuss. More deception, I am amazed people can support this.

      While they are at it they should cap CableVision and the others since they provide trash service for premium prices. Hello sling box!

      • Uh huh says:

        @ cha….u made an excellent and quite often overlooked point. Rent for retail space in Bermy is absolutely absurd! I honestly don’t know how some businesses in this island even stay afloat just when u look at the cost of the rental space alone! Not mention employee wages, belco shipping cost advertising cost, etc. Matta of fact, even advertising in the papers or on radio is ridiculously high here especially when u factor in the limited consumer base that your advertising will reach for the money spent!

  3. Avoid the smoke n mirrors says:

    I could be wrong but, it’s my understanding that prior to duty being raised to 35% at the airport, everyone including couriers were subject to 25% duty. Now the airport is 35% and in an effort to make it level across the board, couriers will be subject to the same tax…how is this NOT a level field Mr. Thompson? and for you to blame retailers for not having enough variety is asinine as Bermuda has an extremely limited consumer base to begin with and bringing in every little thing that every individual consumer ask for would prove to be financial suicide because the market just isn’t large enough to sustain that, especially when you have so many competing retailers on this tiny little rock. When you order things online from overseas the majority of your payment remains overseas helping to sustain other countries but when you purchase locally, the greater part of that transaction remains in Bermuda and is distributed throughout the local economy. I completely understand the desire for Bermudians to get the greatest savings and variety available but, we cannot have it oth ways. If Bermudians insist on supporting foreign economies over the local economy then the simple and unavoidable result will be the loss of more local jobs. It’s just the imple laws of math and economics. If u pour out of one glass into another, eventually the glass you’re pouring out of will run dry if you aren’t pouring anything back into the original glass.

    • alsys says:

      Actually you are wrong. The airport duty went from 25% to 35%. Personal couriers duty rates are tiered depending on the type of import, ie, clothing is currently 6.5%, electronics are 22.25 or 25%. Which is why the outrage.

      Please check your facts before commenting.

      • Avoid the smoke n mirrors says:

        So basically you just validated my point in that couriers up until now were NoT at a disadvantage but actually things were tilted in their favor. So now here comes a level playing field where duty is concerned. Oh yeah….please don’t be condescending, didn’t you read my first comment where I said that I could be wrong? Thks for the clarification but the premise remains the same…who’s pool are we determined to fill….our own or another country’s?

        • Clinton J. A. Paynter OBA Affiliated says:

          LOL! We’re filling people’s pools now? Anyway… at the end of the day that vacuum cleaner I buy from town is purchased from a Walmart stateside so stop acting as if all the money spent in Bermuda stays here. Look at the numbers… Bermudian’s already spend approx 75% or their income in Bermuda on essentials (food, electricity, housing, transportation, fuel etc. etc.) What I do with MY 25% is MY business. If I choose to save a few dollars (usually more than a few) buy shopping overseas I will do this.

        • Onion says:

          Here’s the thing though something that cost you 6% duty (clothing) now to bring in will cost you 35%. That is ridiculous. If you have a child i promise you that the clothing selection on this island will really bother you. My daughter is in between sizes, well not really but they don’t carry much for her in her size unless i want to dress her like she’s 14 or 15. Unacceptable for a 10yr old.
          As was pointed out if i buy something online and land it for $50 and it’s $100 here in the shop that is $50 more i can spend somewhere else. I just brought in two ipods for Christmas landed here with duty and shipping paid it cost me $190 less that it would of buying here. I’m sorry i hear the Buy Bermuda argument but $200 dollars is a lot of money. That is a tree a ham and a large turkey.

          • wallawalla says:

            where are you shopping that you can purchase iPODS for $95 less landed each. I’ve shopped around in bda and found the prices at I click, I care and redlaser to be very reasonable. Are you comparing the same capacity I pods. I just did the math and calculated that I would save $6 if I bring it in 8gb touch myself.

        • Puzzled says:

          No Smoke n Mirrors, as your name clearly states, you are trying to create confusion. Unlike Government, the couriers do not benefit from the 35% or any other duty. We the consumers pay this, and Government ultimately collects these funds. Why should Bermudian’s be subjected to forced local shopping because PLP have mismanaged the funds, the local retailers all bring in the exact same items, the prices are outrageous etc….
          And no, the majority of money spent locally does not remain in Bermuda because retailers do not have manufacturing plants here making their own goods. Therefore they must import everything we purchase, put a 500% markup on items, and expect our support.
          While I completely understand the plight of the staff in local retail, we are all counting our pennies period. And since I get up 7 days a week, go to two full time jobs, and earn my money, I have the right to spend it how I feel, in the best way possible to get the full value of it! I don’t receive any form of government assistance, so I have to find the best value in order to provide for my family.
          Bermuda is being bullied and bulldozed straight into an ultimate destination of Dictatorship which I hoped was over when Brown left. I see I was very wrong!
          Thank you Paula Cox for making up my mind as a swing voter, just who I WILL NOT BE VOTING FOR in the next election should you ever move this forward!

        • Guy Carri says:

          It was tilted in the couriers favour when compared to consumers but they are a company and should be compared to company rates inna? It’s still not a level playing field.
          Now: consumer vs courier = courier has the advantage
          Courier vs retailer = level.
          Proposed: consumer vs courier = level
          courier vs retailer = retailer has advantage
          Retailers also get the benefit of payroll tax relief.

          I do understand your point of keeping money in Bermuda but the retailers have to make an effort. Make consumers want to spend money here. We have access to the world and gov is basically trying to force us to accept only what’s available. How third world is that?! They need to focus on other things like keeping IB companies here and reviving tourism so the money keeps flowing.

          • I remain amazed at how misinformed people are with regards to duty rates.

            There is no level playing field at present.

            Airport duty is a flat rate, Couriered items are a simplified rate structure and Imported items are a complex rate structure.

            Duty information is readily available via the custom’s website (http://www.customs.gov.bm/portal/server.pt), more specifically via the tariff search (http://tariff.bermuda.arembis.com/browse.tcl).

            Airport duty is 35% (Customs site has not been updated)
            http://tariff.bermuda.arembis.com/browse.tcl?node=7713

            Here are duties for post and couriered items
            http://tariff.bermuda.arembis.com/browse.tcl?node=7720

            Here are duties for all other import methods:
            http://tariff.bermuda.arembis.com/browse.tcl

            For example, let’s say you import some Cashews. You’ll note that ‘Food Products’ carry
            35% at the airport
            15% via courier
            5% via import (http://tariff.bermuda.arembis.com/browse.tcl?node=461)

            There are a great many examples of this where the courier vs. import fees do not match, in both the couriered vs. the import’s favor.

            Unfortunately, we are not taking a pragmatic approach and this seems more like a tax grab than an actual industry solution.

            If the government wants to ease retailer burdens then they should introduce duty waivers to allow retailers to pay duty on items after they’ve been sold rather than upfront.

            If the government truly wants to ‘level the playing field’ they should introduce a flat rate for all imports and lower payroll taxes to compensate. http://www.21square.com/2007/11/a-fair-tax-cut.html

            • Correction: A tax rebate as outlined in the fair tax link is preferable to a payroll tax reduction.

            • Voice of Reason says:

              Dennis,

              The government allows retailers to defer their duty for 3 months, so that in a way helps with cash flow.

              Your 2nd suggestion about a flat rate make sense, but, then here comes the question, how do you pay for it?

              • sala says:

                NO they dont, retailers pay everything up front. retailers want the defferment!!!!!

              • Uh huh says:

                That deferment is only for the economic empowerment zone in de back of town.

            • Voice of Reason says:

              Also, you shouldn’t be so amused, most people on here don’t have a clue, they just spout off whatever they can!

        • Responsible dog owner says:

          Aren’t you missing the point?

          The person who will ultimately suffer is the consumer who has to pay the higher duty rate.

          Bermuda retailers should be reminded that internet shopping is normal practice throughout the world, even when there is a mall around the corner. Why should they expect Bermuda to be any different?

    • KMA!!!! says:

      Ya Lost, go stick ya head back in the ground!!! Ostrich

    • Tommy Chong says:

      What’s asinine is that business owners put 75% and up markups on the landed cost of their products & then blame consumers for their lost. It’s obvious when looking online that business owners bring in seconds & overstocked merchandise that would be only sold in outlet stores at cheaper prices abroad. If store owners stop being so greedy and sold their products for a reasonable price then consumers would buy Bermuda. Instead businesses go cry to the government about all the people who have seen the light of online shopping & refuse to be robbed anymore. Besides where is all the money businesses make off of a $30 toy that sells for $8 in the states or a $60 shirt that sells for $25. I guarantee you that money does not go to their employees cause I know how much people get paid in retail. That big money goes straight in the retail owners pocket & then boo! Hoo! no one wants to be ripped off anymore. I’ve done the math & buying retail plus in Bermuda equals being shafted. There’s no such thing as a Bermuda Walmart just like there’s no such thing as Bermuda competition just business owners lapping up the naivety of some consumers. Avoid the smoke n mirrors you are either a greedy store owner or someone who needs to educate yourself on Bermuda rip off economics 101. As for us “the online shoppers” if the milk turns out to be sour, we ain’t the kinda cats to drink it.

      • GMS says:

        Are importers/retailers not entitled to profit any on the goods that they bring in? Are they allowed no return on the capital they put at risk by importing goods for consumers to buy in Bda? Should they not be compensated for their time and effort in sourcing and going through the exercise of importing goods so that when you want something, you simply have to journey to their shop and get it?

        Under your scenario, who would ever get into the business of importing goods for sale. There are not too many folk who will work and put their capital at risk with no prospect of any return, much less a profitable one.

        • Puzzled says:

          Retailers can put a 1000% markup on their goods if they so please. What they dont have the right to do is force us through the use of Bermuda Government to have to line their pockets while shredding ours!!!! So go ahead and be greedy. At the end of the day, I will continue to shop where my dollar gets me twice as much for the equal or greater value for my profit!

    • The Future says:

      Dollars need to go where value is added. If retailers are not adding value, dollars will flow elsewhere. This is but a microcosm of Bermuda’s “economy”. Which brings up an interesting point: most people seem to be unaware that a economy is about adding value. Protectionism usually stems from a failure to add value locally or an unfair advantage retailers overseas have (economies of scale, tax subsidies on agricultural goods while no local subsidy exists etc.). Money is flowing overseas unless value is locally produced. The question is, is that money flowing through a retailer…or directly from the consumer.

      Retailers can add value through immediate gratification, warranties, after sales support and the like. Where this isn’t valued, they are a ticking bomb waiting to explode.

  4. Guy Carri says:

    Good letter. If courier duty goes up, shopping in Bda will definitely not get any better for consumers. Retailers will never “have” to increase standards (service is BAD), they can keep the variety low since less people are shipping things in, and they will be able to continue to gouge. Why didn’t/doesn’t gov reduce the duty for retailers so they can offer goods at more competitive prices? Then prices are more comparable and retailers will have to raise standards to win business. They cry how low sales are but some keep expanding (Mango clothing is here now), LV’s just got redone and reported business is up (could it be b/c it’s competitively priced?!). I’m sure retailers will justify it as trying to serve Bermuda better and make up the shortfall. Couriers are just like retail. Business. I understand we need them and the amount people they hire etc. but come on, you want it all!! Do something to help yourselves.

  5. GMS says:

    You are incorrect there. Everything imported to the island through entry points other than the Airport arrivals hall, is dutied as per the HM Customs Tariff Schedule. Duty rates range from 0% all the way up to 150%, depending on the item in question.

  6. Clinton J. A. Paynter OBA Affiliated says:

    Anybody seen the local commercial that says when you “Buy Bermuda” 68% of the money you spend stays in Bermuda. I understand the goal of the commercial but it sounds ludicrous that the item you purchase in Bermuda costs you $100 but it’s true value is $32 stateside.
    Whenever I can purchase items overseas and save money I will do it. Personally I feel I spend enough money in Bermuda, and the Gov. Already receives enough taxes from me. I buy all essential items here. I purchased my car, pay tcd fees… Fuel etc. Electricity, rent etc. Etc. The majority of peoples money is spent here anyway… I would say 75%. What I do with that remaining 25% of income is my business and if I choose to save money on my children’s clothes buy ordering them online… I will do that. If a laptop in town costs $1200 but I can get it from BestBuy for $450… (Documented) Where do you think my purchase will be made?
    The Gov. should be looking for ways to make goods cheaper in the stores, this is the real issue. Instead they are throwing more taxes on our backs.
    Like the majority out there I will spend MY money where it will go the farthest…

  7. LOL (original) says:

    Increasing the tax burden will just make the economy contract as people that now have less expendible income or did not have it in the first place will just not spend meaning less money following in the pot.

    LOL

  8. Uh huh says:

    ?

  9. Cancer says:

    She ain’t gonna listen cus the country’s bankrupt. She needs the money!

  10. Uh huh says:

    @ Clinton Paynter, it’s that 25% of a consumer’s discretionary income that makes or breaks an economy. A lack of circulation of the consumer’s 25% to retailers is the reason why the economies of the world are stagnant including Bermys. Governments around de world are tryin to encourage their ppl to spend at home it int just Bermy

  11. Hmmm says:

    If we can buy an item abroad at retail prices and ship it individually to Bermuda and STILL save money versus local business, it is not a sign that local business are beleaguered or unfairly treated. It’s a sign that they are trying to fleece their customers, couriers like mailboxes are required for an island economy to keep supply and demand in check. Unfairly penalizing them (or any other competitive force) would make Bermuda less competitive for customers and mean higher prices for everyone.

    There are many local stores that sell items at reasonable prices, even at US prices and I bet they have no problem with people ordering online. Places like certain Reid street electronics stores (I’m looking at you Complete Office and iStore) that charge 2 and 3 times as much for a product than it costs in the US deserve the drop in demand they are getting. If you can’t make a living with your business model, you need a new one. You don’t need to grovel to the Government to penalize those who have figured out how to be successful at your expense.

    • Onion says:

      Well said, i couldn’t agree more.

    • Let's Think About This... says:

      To buy an 11-inch 128GB MacBook Air in the states and carry it it costs $1618.55 not including the plane ticket, hotel, and transportation costs. To buy same laptop on line and fly in via Mailboxes costs roughly $1550 ($1480.77 for item and duty/wharfage, $69.23 for handling charges). To buy at iClick (Complete Office’s Apple outlet) costs $1389. In this case, it works out to buy locally than away.

      • Rick Rock says:

        A fully featured iPad 64GB is $1,249 in Bermuda and $829 in the US. I could ship it here, pay duty on the full US retail price, and still it would cost less than buying it here. As it happens, I did buy one here, accepting the difference in price vs immediate availability and service. But let’s not pretend it’s a bargain.

        The retailer in Bermuda pays tax on the wholesale price, not the retail price.

        • Real Talk (original) says:

          … until it gets here and you charge it up and nothing happens. Or it bombs out after the first week. There is something to be said, particularly with electronics, for buying it local if the price isn’t ridiculous.

          Let’s be fair here. We cannot expect retailers to equal US prices in every instance. That is very unrealistic and unfair. We have to determine what our threshold is and what markup we can stomach. For me, it’s 100% on certain items… maybe even 150%. 300% is just taking the piss.

          Sorry. I think $1249 for a 64GB iPad is a pretty fair price even though it’s $829 in the US.

          Shipping: $50
          Duty: $292
          Total: $1171 giving a savings of $78. Whoopty freaking doo. I’d glady do away with the $78 savings to know if there are any problems with it I can walk around the corner and have it replaced.

          It’s a bargain.

          • Mad Dawg says:

            Didn’t he say he bought one in Bermuda for the reasons you outlined? Do you have a point, or are you confirming you agree with him?

            But it isn’t a ‘bargain’. The local shop pays duty on wholesale price. They set their prices at the high end of what you would have to pay to bring it in independantly.

          • Anon Ymous says:

            Riddle me this……

            I just bought a games console locally (Nintendo 3DS Mario Bundle: US retail $229 – BDA retail $349!!!!) for the very reason you mention, the warranty. My big issue with this is that the warranty is 30 days?!?!?!? Just, wow!

            Benefits of buying Bermuda – Discuss…..

    • Reality says:

      Nice!

    • Pete says:

      I find the prices aren’t too bad for electronics as there is a lot of competition in that space. I compared prices around island as well and iclick and The Complete Office aren’t that pricey as they have warranty that is on island whereas if you bought it overseas, you are SOL…. it’s the clothing choices personally that irk me due to styles/sizes/etc. People just like to look at sticker prices and compare that to Bermuda landed costs where they forget that it costs someone to order the goods, ship it here, pay the duty, rent, etc. At the end of the day, I don’t think they’re making much….

  12. tricks are for kids says:

    I hope that she says NO! because his prices are too expensive..he makes money off of people too…He charges by weight or diameter of package whichever generates the most income for him..It’s about choices…and we the public should have the right to CHOOSE how we want our packages to come in..some companies don’t ship Internationally and therefore he would get those customers that want goods that cannot be shipped here..If I could get something shipped directly to me at a lesser cost than of course I am going to choose that option….I have that right….Don’t think for onr minute that he has the best interest of the Country at heart either (pure greed is fueling his request). The decision will benifit HIM if it goes in his favour not us…

    • Tommy Chong says:

      This is true, so just a little hint find companies that ship USPS instead of UPS, Mailboxes or others that are just as greedy as retail. Then your package comes to BDA post and you help Bermuda not private business owners that most likely spend the money they make abroad. USPS is very reliable, has online tracking & expedite shipping so its a great inexpensive alternative. Bermuda lets give all businesses who rip us of a run for their money! Literally!!!

      • wallawalla says:

        i agree

      • Rick Rock says:

        That’s free choice. With USPS it takes a bit longer but costs a bit less. That’s a perfectly reasonable choice.

    • Let's Think About This... says:

      The reason why Mailboxes, Zipx, and all the other couriers who ship via air charge according to whichever is higher out of dimensional weight versus actual weight is because that’s how air freight is calculated worldwide. You fly something by Air Canada or any other commercial airline, the rates are the same. That’s the reason why bags under 50 lbs are one cost, under 75lbs a few dollars, etc. Everyone has a minimum charge or adds a couple of cents to the carrier’s rates to make a profit. Also, no matter the courier’s charges, you still have to pay the duty which the courier doesn’t retain.

      Be aware that the the individual tariff codes are applied to air freight shipments imported through the commercial airlines and Cargojet. The 35% rate is applied to items brought in checked or carry-on luggage. If Premier Cox allows the courier duty rates to rise, your only way of getting items into the country with the regular duty rates will be via air or ocean freight through a freight forwarder.

      Think of it this way: if they raise duty rates for couriers, people could be charged 35% on a $1000 2lb box versus 23.5% on that same box. That’s $350 vs $235 on a 2lb box. Shipping is still $25 max because the box is small and light. Pretty soon it won’t be fair to just raise couriers and not the freight forwarders. Imagine paying 35% on $100,000 of appliances that filled a full container (roughly $3700 from New Jersey). That’s $138,700 instead of the present $127,200. Speak out against the couriers rates if you want, but realize it will end up stinging the consumer as well.

  13. Anon Ymous says:

    To stimulate an economy you must encourage spending. This whole 35% duty on personal imports is misguided to say the least – the intention, to encourage local spending, misses the point and serves only to limit personal choice and tieing people to the option of high cost local spending and higher cost / effort overseas spending (should the increase be implemented), therefore, the likely outcome is discouraging spending overall – the exact opposite of what this economy needs.

    Time for a rethink!

  14. Come correct says:

    Why don’t they just give up the fight and decriminalize or legalize and control weed? We all kno at least 60% of this island smokes, so why doesn’t the government take the profits for themselves instead of leaving it in the hands of street dealers? The price of weed here is or almost is more than gold and people still buy it every day…and they aren’t taking advantage of that? Cigarettes and alcahol are known killers, weed is not, and its also personal choice, you do it if you want or you don’t. I know there’s a lot more to it than that but that’s above my pay grade, I could be dumb but I don’t see the issue here.

  15. Real Talk (original) says:

    Misguided move which will only result in open hostility towards the retail sector. People are sick and tired of these ill-conceived regulations which are increasingly making living on this little rock more and more inconvenient and less attractive.

    Mr Thompson makes a good point in that savings abroad on items which may be hard to get here translates to more $$$ that can be spent in the local economy. My personal experience has shown me that prices (at least as far as clothes go) are actually very reasonable. The issue there more than anything tends to be selection and size as opposed to price. (Combined with restrictive shopping hours which makes going into town to shop a near impossibility).

    This one will no doubt leave a bad taste in the mouths of many as those of us who have been too slow to vote with our feet (nevermind in the polling booths) will be left footing the bill for the past few years of opulence, overspending and a bloated civil service…

  16. GeeWiz says:

    Aren’t the couriers local businesses too? Hiring local employees? Why are they subject to the 35% tax. Why buy Bermuda when the stores do not and cannot carry every product the consumer needs or wants.

  17. Uh huh says:

    Of course u can buy things in the US much cheaper! But the reason for this is something that will NEVER be the case in Bermy…America has millions of consumers and the retailers sustain their businesses based on VOLUME! You will NEVER have this advantage in Bermy! I have an idea…force all landlords to drop their rents by 35%, force belco, telephone companies, Internet companies, and grocery stores to do the same! Then we’ll really see discretionary spending skyrocket! And yeah…force these banks to bring their loan and mortgage percentage rates down into line with America’s rates while your at it. Matter of fact…force contractors to lower their rates to build a house in the first place and go even farther by forcing land owners to lower the price or a piece of the rock cause I’m tired of payin rent and I wanna own my own home one day too! With long hours, and a family this crap ain’t easy so let’s force everyone to drop what they charge cause thats da only way it really benefits everybody. We know none of what I said will ever happened cause the premier, along wit every single mp on both sides have never voluntarily or mandated the returning of even 1 % of their salary in order to give back to the people’s purse! Everyone’s arguments on here including mine are rooted in self service and that’s just the facts! So all of us need to get off of our high horses and at least be real about our motives and that’s for plp, up, oba and DIY!

    • Bermyman says:

      Mate, if the government had taxed the economy (landlords) properly during the good times we would not be in this situation and the cost of rents and living would not be so high. But they didn’t because they were too busy losing money on things like the Police station and Tcd, dockyard pier … list goes on! They overan costs on those projects in the millions. The result is that we have a crazy amount of debt that you and I and everyone else has to pay off while they drive free cars and pocket large paychecks year in year out. Take free trips, fly first class and stay in top hotels. On top of that they make sure all of their mates and family members have jobs and contracts and are getting paid. Getting paid with you and I’s money . Day in day out. You may not care about who you vote for but if it stays the same way then you will continue to pay for ministers free car and they will continue to tax you upto your eyballs for their lifestyle and mistakes.

      • walls says:

        spot on Bermyman!!

      • Uh huh says:

        Hate to burst your bubble but all of the things u mentioned will not change with a change in govt. and the ” good times” started long before this govt and thre was no handle on any of the things I mentioned then either. Part of the problem may be the fact that too many party members on each and every side of politics in Bermy have their hands deep into one or more segments of our economy whether its through owning rental property, owning retail businesses or being a bank executive….when it comes to lowering the cost to consumers across the board it just ain’t gonna happen. Example…if I’m an mp and I own rental property that nets me thousands of dollars via exempt companies, there’s no way that I’m gonna attempt to pass a law limiting the amount that can be charged for rent on a home that I just built. Especially when the only reason I built it in the first place was to make money. If I’m a bank exec. I ain’t tryin ta lower lloan rates cause thats gonna effect my bottom line not to mention my bonus. Who cares if ppl end up paying for a something 2 n 3 times over! When ppl are in power they tend to protect their own interest period no matter what party affiliation they have.

        • Bermyman says:

          Not all but some will change. Taxes are higher than they ever have been, debt is larger and more out of control than it ever has been. And the Government in power continues to spend more and more! No bubble burst mate but if we dont change the government then things will continue to get tougher and there will be no change. I can guarantee if another party gets in then they would cut costs. Hell if I had my way we would have half as many ministers in the first place!

          • Uh huh says:

            Taxes and debt are higher and more out of control throughout the whole world and sadly, the reservoir of politicians that we have on any side are no different from the politicians in the rest of the world.

  18. This Dude is a Douche says:

    Open letter to Steven Thompson.

    Why do you attempt to protect your own selfish self interest in this way. You do not represent the industry or Bermudians, you are ONLY concerned with your own pocket, so please don’t be sanctimonious.

    It should be fair play for everyone including you Steven Thompson!

    • Truth (Original) says:

      …you do realize that if this tax goes through, it’s you who will pay more right?

      • wallawalla says:

        maybe the good times started before this government…but weren’t the plp going to CHANGE that:-) ……or did hey have no choice but to decieve us:-) :-) !

  19. Clarity says:

    Don’t do it! I could run down a list of items that I regularly buy abroad that I cannot get here like female size 11 shoes (unless of course I have time to go to each shoe store in Hamilton every day in hopes that they finally receive a new shipment and I can get one of the two size 11 pairs brought in by the retailer before they sell out – never mind if it’s the right style or if they are comfortable). Increasing duty will not encourage me to buy Bermuda – it’ll encourage me to be more frugal with what I already have – so maybe it’s a good thing after all! If this duty increase gets pushed through, I’ll definitely be spending less in 2012/2013 on online purchases and consequently paying less to Bda courier companies, Bda shipping companies, the Bda post office and to the Accountant General in customs duty. The money saved will go straight to my savings and investment accounts. And as swing voter, I can see the pendulum swaying in the opposite direction…………
    P.S. If you need to tax my income to help support those less fortunate – then do it outright, don’t try to screw me with outrageous customs duty. This duty increase will simply result in me contributing less in service fees to Bermudian courier/shipping companies, and by implementing this across the board, you will penalize those with limited incomes who will also be forced to pay higher duty rates on items that cannot be purchased here.

    • Voice of Reason says:

      I think you are missing the point, I don’t think duty can encourage anyone to Bermuda, because i wear size 14 and that’s next to impossible.

      But does it make sense for rates to be different depending on how they are brought in? That makes less sense to me.

  20. walls says:

    The whole thing stinks. The PLP have spent OUR money like no tomorrow and now they want us to dig them out of the whole they’ve got themselves into!!

    All of their “accomplishments” are just the reason why they are in this mess. Anyone can write checks to buy ferries, schools, ship docks etc when there’s plenty of credit available from the reputation of the pre 1998 government!

    Buying votes is easy, but eventually when you’re in that hole taking away Beyonce, free ferries etc is going to be very hard!!

    • walls says:

      hole that is!!

    • The Future says:

      Actually they have not gotten just themselves in a hole. They have gotten everyone in this country, including the unborn, into a hole.

  21. Mad Dawg says:

    Retailers in Bermuda don’t need protection. They are doing fine. The only parts of retail that are not doing well are car and vehicle retailers, and food retail. Nobody brings in food or cars by courier or on a plane. The rest of retail is doing very well and needs no protection. Cox is just doing this purely as a money grab to raise taxes. There nothing in what she suggests that will do anything at all to protect one single local retail job. The suggestion that she is doing these things to save jobs is ridiculous.

    • Uh huh says:

      @ mad dawg….just about every sector of the economy has seen challenges, retailers included. Also, I know for a fact that even many doctors offices and even funeral homes have been hit. Yes funeral homes hit because ppl are only spending the bare basics in order to bury their loved ones and doctors offices because ppl are unemployed and can not afford to pay for a visit or are employed but due to lower wages, they have chosen the most basic insurance available that doesn’t cover all of their doctors visits.

      • Rick Rock says:

        Mad Dawg is absolutely right.

        September 2011 retail sales were 0.1% down on the prior year. Building Material and Hardware were UP 14.4%. Service Stations UP 6.5%. Apparel UP 13.1%. Food and liquor down 3.2% and 4.3%. Motor Vehicles down 14.1%. Tourist related stores were UP 28%. Furniture and Boats sales were down 9.9% and 11.1% respectively.

        So what does all this tell us? Food, cars, boats and furniture are down, because there are less people living here and moving here. The tax structure suggested by Cox will not make any difference to those areas. People don’t bring back cars on planes. They don’t order furniture or food over the internet.

        But the other areas – apparel, hardware, tourist related stores, are all doing fine, comparing 2011 to 2010.

        Your example of funeral homes is nothing to do with retail, by the way.

        So Cox’s increased taxes are nothing more than a money grab, to raise taxes. They are NOTHING to do with saving retail jobs. The retail sectors she keeps saying are ‘suffering’, are actually doing better than most of us.

        This is all on gov.bm, September 2011 retail sales index. (The most recent stats available). The stats, interestingly, for the month just prior to the money-grab by the dishonest government, desperate to say anything to justify higher taxes.

        Don’t believe a single word that comes out of their mouths.

        • Shaking the Head says:

          Rather like the “we have to save 4,000 jobs in retail”. According to the last figures released by Government relating to work permits there were around 3,000 jobs in retail, not 4,000. Take away the jobs that aren’t related to items brought in by consumers such as cars, boats etc mentioned above and the number probably drops to below 1,500. What the Premier probably meant was “we need more taxes so we can pay the salaries of the overstaffed Civil Service as we daren’t fire any before the election”.

          • Mad Dawg says:

            Is that the same overstaffed (by her own admission, highly overstaffed) civil service that got a pay increase in August 2011, retroactive to October 2010?

            Where did the money for that pay increase come from…?

            Oh, right, I remember.

            The same people that are going to have to pay for their new luxury cars.

  22. Think About It says:

    What you ALL fail to realize is that retailers have deals with their vendors. So they are not paying the price THE PUBLIC will see on a website. They pay upwards of 50%-75% LESS and still when it is landed in Bermuda, they sell them at almost 500% mark up of the price the public would have to pay for that same item.

    So that $4000 tv you bought only cost *insert retailer here* between $500-$800

    • Pete says:

      So not true. Do you have proof of the 50-75%? Bermudian retailers simply do not have the purchasing power to get those types of deals as they do not purchase enough to warrant that type of discount. Many vendors do not even want to deal with Bermuda because we are a drop in the ocean…. our business is not meaningful to them on the whole.

      • Rick Rock says:

        They have the same purchasing power as any independent store in a town in the USA. They get wholesale prices. Not the same price as WalMart, but definitely lower than retail.

      • Think About It says:

        Yes I do have proof. I am not like the other idiots on this site that just rant. ALL the established retailers in Bermuda get massive discounts on their goods. You name them, and they fall into the category. The only people who don’t are mom and pop type of establishments.

        • Pete says:

          Of course retailers get wholesale discounts but that is not as high as you think. And to claim that retailers are putting a 500% markup, this is not true (except possibly for fast moving clothing which traditionally has a higher margin).

          From the wholesale/first cost, look at all the additional expenses for bringing something in via ship, you cannot claim that retailers are making ASTRONOMICAL margins on the landed cost in Bermuda (cost to get this to the freight forwarder in the US, shipping costs via ocean, freight forwarder’s costs, insurance, salary costs to process orders, cost of capital for unsold items while they sit on your shelf, prepaid duties on an item that may or may not sell, etc). That is the cost that is relevant and from that cost, look at the markup – not the first cost from the distributor in the US.

  23. Vote for Me says:

    Well well well,
    If the letter from Mailboxes is not the most self serving letter that I have seen in a long time, than I do not know what self serving is!! Why wasn’t the letter sent to the Premier privately – go figure, it is designed to try and get public support for the private profits of Mailboxes!

    The clear solution for Bermuda is to ensure that the duty for importing goods for personal use is the same whether you import as part of your luggage or through a courier company. From a pure numbers perspective, the correct rate for both entities is less than 35%. The correct number will be found by simply taking the total amount of current revenue received from import duty paid from both sources and dividing by the value of the goods that are imported. Once determined, the rate should be charged whether you import the goods when travelling or via courier.

    When the Premier first introduced teh significant duty at the airport, my immediate thought is that she is effectively (and arbitrarily) increasing the profitability of the courier companies. That was a clear example of the principle of unintended consequencies!!

    The letter is also interesting because there is a difference in perspective. It is clear the retail sector employs more people than the couriers. Thus any employee impact for retailers will be more severe than the impact on retailers.

    How many of you are really prepared to buy Bermuda and save jobs. The decision is not ultimately about the PLP but about real jobs for your relatives.

    • The Future says:

      There is a little more to it than that. If your relatives are doing little of value, in the long run their activities are not viable. In the long run Bermuda’s economic model is not viable. Not unless value is locally produced. Consumers don’t need to be persuaded as to what constitutes good value. Follow their money and enuf said. This is but a mere preview of the inevitable spiral that false economies must succumb to. Like gravity, fundamental laws of economics always win in the end.

    • Rick Rock says:

      See my comments above and explain to us why the money-grabbing taxes are necessary in the context of the September Retail Sales figures.

      • Mad Dawg says:

        No answer from Vote For Me, I notice.

        • LOL (original) says:

          His piece was damage control pure and simple. Look at the responses above people are not happy with this. Unless the PLP supporters that read here are convinced that everyone on here are of the same demographic and their vote was determined already. Nahh….

          LOL

          • @ LOL original
            No need for damage control. My recommendation is to have the same duty at each entry point, which would be less than 35%.

            I also agree that retailers need to do a better job at service. With some of them the staff act like they are doing you a favour when you buy something. One of my pet peeves is when they are having a personal conversation and do not stop immediately once you enter the store.

        • @ Mad Dawg
          The Chamber of Commerce commended the Premier when she announced the reduction in payroll tax and increased duty since it provided much needed relief for their members. At teh time, tehy were at the point of considering redundancise in the retail sector.

          It is clear thaat any reduced revenue to government must be compensated in another area. If memory serves, the increased duty will not completely offset the revenue lost from the payroll relief.

          In terms of my fundamental point, the Mailboxes letter is clearly self serving. They could have simply sent the letter to the Premier since the letter indicates that prior submissions have been responded to by the Premier.

          To summarise, I think the duty for each entry point should be the same. Decide how much revenue needs to be collected and then calculate a rate – simple. All of us can then make a decision on how to import based on convenience and any other relevant factors.

          As a consumer, my solution to the current economic challenge is to simply buy smart – only what I need and to compare prices.

          • Mad Dawg says:

            VFM, the Chamber of Commerce is hardly impartial, any more than mailboxes.

            It wasn’t too long ago that every item at the airport was charged its individual duty rate. The airport rate was standardised to 25% on everything to make life easier for customs agents.

            If you think the duty should be the same at each entry point, why wasn’t that done? i.e. ewhy didn’t they change all entry points either pay the individual rates (10%, 15%, 25%, or whatever applies to that item), OR every entry point pays the flat 25%? That would have been standardisation. But that’s not what happened.

            Cox INCREASED the airport to 35%, and only then started talking about standardisation. Which means an enourmous tax increase, whatever point of entry.

            There is also no particular reason why different entry points should necessarily have the exact same tax rate. It’s never been an issue before. It’s only an issue now that the government is spending a quarter of a billion dollars a year more than it receives.

            The upshot is that this whole exercise whas a tax grab. In every way, the tax is going inrease radically.

            You don’t appear to know much about economics, but increased taxes has the effect of suppressing economic activity. Ask Obama, who found it necessary to inject billions into the US economy. A wide-ranging tax has the inverse effect – it takes money out of consumer’s pockets, and they buy less.

            The most disgusting thing is that Cox dresses this up as a way of “assisting retail”. Which is a load of codswallop. This has absolutely nothing to do with saving one single retail job. Anyone that believes that is extremely naive.

  24. SMH says:

    It makes me laugh when people call the retailers greedy. Obviously these people have never been a retailer before to know what it costs to import goods. First of all, most retailers have to pay for their goods up front! Secondly, and most obvious, are the shipping costs to Bermuda. Then add to that the duty. Then add to that the cost of the delivery of containers. Then add to that the cost to unload the containers. Then add to that the cost to have employees unpack and then price and stock the shelves. NOTHING is cheap in Bermuda. I have to agree though that many stores in Bermuda just don’t know what the consumer is looking for hence the reason why people shop overseas. Someone made a comment about how it’s cheaper in the long run to buy something here after you’ve factored in the airline ticket and hotel accommodation. No one goes away to buy just one item! People go away to get off the rock for a while and have fun shopping too! We are ALL guilty of spending overseas! We get what we are looking for and enjoy the experience of buying what can’t be bought here. But, we must Buy Bermuda when we can. At the end of the day, it makes our economy stronger. The retailers MUST buy for the consumer – not for what they themselves want to sell. If I go into town and want a set of King size sheets and a comforter, I find it very difficult to find that size. Not everyone sleeps in a queen size bed! So, I have NO CHOICE but to purchase from overseas. I’m thankful that we’ve had the choice of using Mailboxes or IBC for ordering on line!

    • Rick Rock says:

      People WILL and DO buy in Bermuda if the service is reasonably good and the prices are competitive. And lots of shops here do very well. In September 2011, apparel retailers sold 13% more goods than they did in September 2010. That isn’t exactly doing badly.

      There is no reason at all for the government to increase import taxes, other than to squeeze as much as they can out of us, the taxpayers, so they can carry on spending like drunken sailors.

      Have those Beamers and Audis been delivered yet?

      • Pete says:

        Rick, year-over-year growth has been decent but let’s not forget that this is the traditional busy season for retailers where they get over 1/3 of their annual sales. This will just sustain them over the hump until the summer whilst they pay employees until it gets busy. Agree with you on people purchasing based on value.

        Also awaiting the Audis….

        • Mad Dawg says:

          Rick, you appear to be confused. Is this the traditional busy season, or is the summer the busy season? You imply both are.

          In any case, most parts of retail are doing fine. Apparel, tourist goods, service stations, building materials, hardware, are all UP year-over-year. Doing great. Doing better than most of us, actually.

          Boats, cars, food are all down year-over-year. And that’s because there are less people here, and nobody new moving here.

          There is nothing in this that will save one single retail job. Not one sinlge car or boat will be purchased in Bermuda as a result of this.
          Nobody buys those things on the internet.

          This is nothing more than a tax grab. And it’s just the beginning.

          • Pete says:

            Hey Mad Dawg, I believe you were addressing me but typed Rick. There are two traditional busy periods in the Bermuda retail space; pre Christmas and the Summer tourist period. Both are definitely busy seasons for different reasons. Year-over-year growth, whilst positive, does not necessarily imply that all retailers are profitable (or more profitable vis-a-vis the growth mentioned in the Gov’t stats). If you look at that stat coupled with the years of monthly declines, retailers are SOL.

            In no way do I believe the Gov’t should choose industries to protect per se, market forces will determine which ones will be viable and those that are not better change their business model – quickly! At the same token, I do think that the payroll tax holiday just granted to the retail sector will lessen then hardship many retailers are facing, we do have to pay for this somehow and trust me, the Gov’t will get into our pockets somehow…. we’d be a fool to think they won’t get it from our pockets whether it be increased airport taxes, increased import taxes through Mailboxes/ZipX/etc…. I agree with you 100% it’s a tax grab but if it’s not this, it’d be something else….

  25. choices says:

    i feel it for this guy, they are now gonna put his business under the microscope for payroll tax, social insurance, pension contributions and maybe even try to take away his bermuda status, also any work permits at his business will not be renewed

    he will probably also be deemed racist

    if we must have PLP its time for a new leader, We can no longer bear the pain of her leadership in training routine

    give us kim wilson, even cousin derrick, or someone from outside the party but please not another year of this Lady

  26. What next says:

    This “tactic” from the Premere is pure manipulation, straight from the Ewart Brown School. Think about it. She released a “Pre budget statement”. Why? Have they (the government) ever don’t that before? She is doing one of 3 things in my opinion.

    •1. Issuing the statement to put the feelers out so she is able to determine how people feel and adjust it accordingly for the actual budget so as not to loose votes.

    •2. Making inflammatory regulation proposals to get the people’s blood pumping so she can then renigg and show what a reasonable Premere she is and how she listens to her people blah blah blah.

    •3. Trying to stir up the pot to deflect attention away from real issues such as how the present government has been overspending since they got into power and on her watch.

    Be very careful peeps, there is going to be a lot of this type of “Spin” running up to the election. If you don’t stand for something, you can fall for anything !!!

    • Vote for Me says:

      @ What Next
      On a more practical note, the Premier has done what she pledged to do.. make the financial process more transparent. If you read the full statement, you will see that she is committing the government to no less than 6 financial updates throughout the year. That will be a tall order and I look forward to the result.

      Note also the new process for budget preparation – she is letting the public have input to somce of the policies she is considering. We all need to make sure we send in any comments we may have.

      • What next says:

        Thanks, good points.

        I feel we should still ask ourselves why now w/regards to transparency. Whichever way you slice or dice it, it is still a way to allow her the opportunity to change proposed policies for votes. We would be naive to presume it is because she values people’s opinions.

      • Mad Dawg says:

        So Vote For me – you’ve given up on arguing for the need to ‘protect retail’, because it’s a patently stupid idea.

        Now you’re trying to suggest we congratulate our highly-paid public servants for telling us what they’re doing?

        • @ Mad Dawg – you have given me my laugh for the day!! I am not a defender of retail. I simply think the letter from Mailboxes was patently self serving. If I had to decide we would have the same rate for import duty whether at the airport or via courier.

          The fact is that the increased duty at the airport will have the unintended consequence of increasing business for couriers unless the import duty is equal.

          When the duty increase was first announced I am sure Mailboxes understood the potential for increased business. If I am not mistaken, they increased their advertising around that time to entice new customers.

          • Mad Dawg says:

            So why wasn’t duty simply normalised? That is not what has happened. It has increased (or is planned to increase) radically at every entry point. It’s a money grabbing exercise.

  27. Amazed says:

    let’s be creative Paula. Look every professional in Bermuda, lawyers doctors, accountants, etc. only pay tax on goods and land, yet the lawyers are making $500 plus per hour, is there not some way they can contribute a little more instead of the working man, who would like a nice holiday once a year to do a little shopping.

    • @ Amazed
      Interesting point – just imagine the fallout if government announced a fundamental review of the payroll tax system. At the moment, professionals and others get a break for any amount they receive over $750k as salary but they are not taxed on dividends – go figure!!

  28. What matters most... says:

    This is really sad, because people are trying to be as economically savvy as they can and they are being backed into corners by the Government. I buy Bermuda as often as possible. But there are some things that they just don’t have and when you ask them to special order something it takes 3 or 4 weeks. Why wait when you can go online order it yourself and pay less in the long run and have the exact item you want.

    We are also forgetting about another portion of the population…those who choose to shop online because they can’t afford to travel, pay airfare, hotel, plus the 35% duty. Its absolutely absurd. Why are they turning the island into a prison for people who work hard and want to do the best they can with their finances. Anyone who has done a budgeting course in school has been told to always shop around and look for the most sensible option. With this proposed increase in duty for importers…nothing will be sensible. The courier companies will lose a great deal of business because people will undoubtedly stop importing items and this will cause a domino effect creating more unemployment (due to courier company lay offs) and then they will have to increase taxes again somewhere else when all these additional people need financial assistance because they can no longer make ends meet.

    Come on…the party that is supposedly for the people needs to do something that is actually for the people.

  29. Kraken says:

    I don’t see why we should buy Bermuda…the Government doesn’t, perhaps we should charge their foreign consultants 35% of their salary on top of the usual deducations.

    I bet they would all of a sudden relaize that there are Civil Servants who have been telling them the same thing the consultant just did for years.

  30. d reader says:

    anyone ever hear of displacement? if the people dont buy via online and couriers they will buy via retailers

    either way they will and must buy..so the shipping companies will still ship
    the aircargo will still cargo it in

    only mr thompson and couriers will possibly see a dip

    and he dont employ 1000 persons

    • LOL (original) says:

      I disagree people will do without as I know for a fact that I do not have the disposable income to buy anything needs and prices determine if I buy. Your statement does how ever reflect that Bermuda has sat on top for far too long. Perhaps a realty check is way passed due.

      LOL

  31. star man says:

    Best not to meddle with the Free Market!

    Once you start diddling with duties, charging this guy one rate, the other guy a different rate, you run smack into the Law of Unintended Circumstances. The PLP are quite familiar with this Law, as they have had to reverse almost all of their dumb policy decisions over the past few years.

    In simple terms; the PLP have no clue of what they are doing or not doing.

    • @ star man
      Thus the need to charge the same level of duty at airport and couriers. Retail and couriers would then compete on service etc.

      • Mad Dawg says:

        You keep saying that but it’s not what happened. The tax was INCREASED at the airport from 25 to 25%. ONLY THEN did they (and you) start talking about ‘normalisation’. If normalisation was the intent, why didn’t they simply do that? Why now? It’s because they wanted to INCREAE the taxes RADICALLY at EVERY point of entry. You can’t just dress this up as ‘normalisation’. It’s a tax grab by a desperate government out of ideas.

  32. Stephen Thomson says:

    Dear All
    Some very insightful comments. However, since it was my letter to the Premier, I feel I should weigh in here.
    1.My letter was sent privately to the Premier over 3 weeks ago. Credit to the Premier, she did acknowledge it. However, I want Bermuda to know what is being considered and what effect it may have on all of us.
    2. Why is the discussion limited to the airport duty and couriers? What about the Post Office, air freight, ocean freight etc ? Many people shop online and bring in items via those methods. i.e. fridges, furniture and many larger items. These are still personal items and must be subject to the new 35% tax. Couriers and the airport represent only a small portion of what is imported for personal consumption.
    3.If we want to “harmonize” the customs duty, air, ocean, courier and the post office are harmonized already. The airport duty is the only area currently not harmonized. Fix that area.
    4.Its simply ridiculous to increase duty rates by 500% on some items. Currently clothes are 6.5% through every port except the airport. Moving it to 35% is an increase in excess of 500%.
    5. My advertising campaign happens every year in September. This year was no exception. The duty increase at the airport was announced in October. My campaign had nothing to do with the announcement.
    6.Mailboxes, as a company, will not pay the duty increase. This is past onto the consumers. I am standing up and voicing my opinion as its simply unreasonable and stiffles business. Yes, my business too will suffer.
    7. The retail sector currently has the benefit of “payroll tax relief” for the next months. In addition, the airport decision, ostensibly, was done to assist them.
    8.We have no such concessions and no such assistance. Protectionist policies by intervening governments never work longterm. Government, create a level playing field and get out of the way.
    9. Duties and tarrifs around the world are being removed to create free trade between countries. Look at NAFTA , the Asian block and the EU. Why is Bermuda moving in the opposite direction?
    10.Its 7PM and most of my staff are still working. We operate 24 hours a day with 3 shifts in order to expedite our customers orders as rapidly as possible. This is innovation, creativity and simply hard work. E Business is all around us and everyone, including the retail sector will need to chnage and move with the times.
    11. Internet shopping the world over is growing. In Bermuda, our people are being encouraged by massive taxes not to avail themselves of this? How unfair is that?
    12.We have 2 stores in Hamilton, pay Corporation taxes, pay payroll taxes, pay all the import duties for our customers up front and pay all the shipping costs for all packages. We are not really so different from many stores and service businesses but are actually paying more taxes to the government as we do not get the payroll tax relief. By the way, all of our staff are Bermudian with one spouse of a Bermudian.
    13. We are not a courier. Fedex and DHL are the couriers that we hire to move our items for us. They are the couriers and we simply a business carving out a niche in Bermuda that, clearly, Bermudians and residents like and use. With over 11,000 customers, we are proud of our service, our staff and our customers.
    In closing, harmonize the duty rate accross the board by simply lowering the duty rate at the airport.

  33. otanga says:

    what about the expats that are sending money ouy of here what a joke

    • Hudson says:

      What’s the joke? It’s a free society last time I checked. I’d be more worried about the Bermudian’s that are sending money out of here… It’s called hedging your bets against a fragile economy sitting on the brink.

      IMHO protectionist policies never work – in fact I’d argue that they become rapidly counterproductive. Let’s take for example the protectionist policies regarding our work permits: The result has been record unemployment, the shipment of key positions across the board to more “user friendly” jurisdictions even if costs are marginally higher, intolerance and blatant hostility towards our guest workers, and a desire for even more “protectionism”.

      As rightly pointed out above, free market policies always will survive. Stephen Thompsons business will suffer in the short term, but will be forced to transform to become profitable in other areas. If in the worst case scenario he closes shop, then there will be other businesses that will see fit to grow into that arena if it is profitable.

      Don’t worry Bermuda, I predict that if we see another PLP term, we will see the introduction of personal income tax in Bermuda. It’s the only way out of the hole that we have put ourselves in. The duties can dissapear and people will merely be taxed on their earnings. Note: i did not predict any form of Corporate income tax as it should remain at zero if we don’t want to lose IB. This of course all IMHO>>>